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Section 44ADA presumptive taxation, professional tax, GST registration, statutory audit, and MSME — CA experts who understand the professional world.

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Section 44ADA Eligibility

Presumptive Tax — Who Qualifies?

Section 44ADA applies to specified professionals. Declare 50% of gross receipts as profit — no books, no audit (if below threshold), file simple ITR-4.

👨‍⚕️
Medical Professionals
Doctor / Surgeon / Dentist
Max: ₹75 lakh receipts
Consultation fees, surgery charges, clinic income. OPD receipts, visiting consultant fees from hospitals. Declare 50% as profit.
⚖️
Legal Professionals
Advocate / Lawyer / Solicitor
Max: ₹75 lakh receipts
Court fees, retainer fees, drafting charges, legal advisory income. All professional fees from clients — 50% deemed profit under 44ADA.
📐
Architects & Engineers
Architect / Civil Engineer
Max: ₹75 lakh receipts
Architectural design fees, structural consultancy, project supervision charges. Interior designers may also qualify as authorised representatives.
💰
Accountants & CAs
CA / CMA / CS
Max: ₹75 lakh receipts
Audit fees, tax filing fees, advisory charges, compliance retainer income. Chartered Accountants, Cost Accountants, Company Secretaries all covered.
💻
Technical Consultants
IT / Engineering / Management
Max: ₹75 lakh receipts
Technical consultants, management consultants notified by CBDT. IT consultants may qualify as "technical services" under 44ADA.
🧪
Other Notified Professions
Notified by CBDT
Max: ₹75 lakh receipts
Film artists, company secretaries, authorised representatives, information technology professionals as notified by the Central Board of Direct Taxes.
Books of Accounts

Maintain Books or Use Presumptive?

📘
No Books Required
Section 44ADA — Presumptive Scheme
Declare at least 50% of gross professional receipts as net income. No need to maintain books, no depreciation claimed, no audit required (if receipts ≤ ₹75 lakh). Simply file ITR-4. Ideal for most professionals with limited actual expenses.
Choose if: Actual expenses < 50% of income
📊
Full Accounts Required
Regular Books Method (ITR-3)
Maintain proper books including cash book, journal, ledger. Claim actual expenses: clinic rent, staff salaries, medical equipment depreciation, car (40% business use), professional subscriptions, malpractice insurance. File ITR-3. Tax audit mandatory if receipts exceed ₹50 lakh.
Choose if: Actual expenses > 50% of income
⚠️
Mandatory Books Threshold
When Books Are Compulsory
Even under 44ADA, books of accounts must be maintained if: (1) you opt out of presumptive scheme in any year (and face a 5-year bar), (2) income exceeds ₹2.5 lakh (IT Act Section 44AA), or (3) receipts exceed ₹25 lakh in any 3 preceding years. Penalty for non-maintenance: ₹25,000 (u/s 271A).
Consult CA before opting out of 44ADA
🔄
5-Year Lock-In Rule
Opt-Out Consequences
If you opt for 44ADA in a year but later want to opt out and declare lower profit, you cannot return to the presumptive scheme for the next 5 consecutive assessment years. This is a critical decision — TaxClue advises on the optimal long-term approach.
Major decision — plan carefully
Common Questions

Professional Tax — FAQs

Under Section 44ADA, your deemed profit = 50% of ₹40 lakh = ₹20 lakh. From this ₹20 lakh, you can still deduct: standard deduction of ₹75,000 (if filing as individual), Section 80C (₹1.5 lakh), NPS 80CCD(1B) (₹50,000), health insurance 80D, and other eligible deductions. After deductions, if taxable income is say ₹17 lakh, tax under the new regime would be approximately ₹2.1 lakh. Under old regime with maximum deductions, could be lower. TaxClue computes both scenarios for you.
Pure medical consultation services by a doctor are generally exempt from GST (exempted under GST Notification 12/2017). However, if a doctor also provides cosmetic surgery (not medically necessary), sells medicines/products, or provides specialised non-clinical advisory services, those may attract 18% GST. Clinical establishments and hospitals providing health care services are also exempt. Consult TaxClue to confirm GST applicability for your specific practice type.
Professional tax (PT) is a state-level tax on salaried individuals and self-employed professionals. It is levied in Maharashtra, Karnataka, West Bengal, AP, Telangana, Tamil Nadu, Gujarat, and a few other states — but NOT in Delhi, UP, Haryana, Rajasthan, etc. The maximum PT that can be charged is ₹2,500 per year (constitutional limit). Professionals must obtain an Enrolment Certificate (EC) and pay PT annually or monthly, depending on the state. Failure attracts penalties up to 3x the unpaid amount.
Lawyers providing services to non-individuals (companies, firms, etc.) must pay GST under reverse charge mechanism (RCM) — effectively meaning their clients pay the GST. If turnover exceeds ₹20 lakh, voluntary/mandatory registration is recommended. Chartered Accountants, Company Secretaries, and Cost Accountants must register for GST if professional fee income exceeds ₹20 lakh annually. B2B billing clients will prefer GST-registered professionals as they can claim input tax credit on fees paid.
Under Section 44ADA (presumptive scheme), no separate deductions are allowed — the 50% deemed profit is the only deduction from receipts. However, under the regular books method (ITR-3), you can claim: proportionate home rent/depreciation for the consultation room, electricity, internet, and medical equipment. The area used for professional purposes vs personal use ratio must be documented. TaxClue helps maintain proper records and justify the proportionate claim.
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